www.mesa.org2008 North American Plant-to-Enterprise ConferenceSeptember 21-23, Orlando, FL

Enterprise Asset Performance Management

Fayez KharbatProcess & Control Systems Department

Engineering Specialist, September 23rd, 2008

The following Strategic Initiatives of MESA International are associated with

this presentation:Asset Performance Management (APM)

Real-Time Enterprise (RTE)

Agenda

• Enterprise Asset Performance Management (EAPM) – basics

• Asset Lifecycle Management• Architecture & Solutions• Drivers & Strategy• Execution Methodology• Expected Benefits & ROI• Summary

EAPM Mission

“APM goes beyond maintenance: It cuts across many boundaries. The bottom line is

return-on-assets [ROA]” ARC Advisory Group

EAPM provides means to share information regarding the right time to do maintenance based on the health of equipment, coupled with the best time to bring an asset down given operational demands

Basics on EAPM

• Operations and maintenance drive plant performance. Operations is measured on maximum asset utilization while maintenance is measured on availability

• Enterprise Asset Performance Management is about striking an optimal balance between asset utilization and availability and sustainability

Since the bottom line in the hydrocarbon industries is Return on Assets (ROA), improving the bottom line is a function of how much utilization is achieved from assets and how well assets are utilized when on line

Asset Definition

PrimaryFacilities & EquipAutomationRemote

Reference DataFunctionalDesignProcedural

Program-CentricProject MgmtEngr/DesignProcurementConstruction

SupportIT HW/SWMobileMRO Material

Asset-CentricOperationsProcess EngrMaintenanceReliability

Activity RecordsCommercialStatusHistory

Human

Physical Virtual

Asset = Plant AssetMachinery, Equipment, People and Information - with the purpose

of providing an economic and/or social benefit

EAPM Measurements

Asset Performance The degree to which an asset performs its intended function measured against agreed targets and standards. These measurements include:

• Uptime – Total Effective Equipment Performance (TEEP)

• Overall Equipment Effectiveness (OEE)• Delivery Performance

EAPM Measurements

Asset ManagementThe actions required to ensure that the asset is:

• Safe for operators, user and public• Environmentally safe and sustainable• Operating at Maximum level of service efficiently • Achieving all the above with lowest asset lifecycle cost

Asset Effectiveness• The degree to which an asset fulfils its purpose• Sustaining economic value• Financial terms measurement – e.g. Net Present Value

(NPV), Return on Capital Employed (ROCE)

EAPM maximize Asset Effectiveness

EAPM Ensures that the asset safely performs its planned function over defined time horizon in terms of:

• The operational performance of plant assets is assured

• The risk involved in operating those assets are controlled

• Energy, Emissions, and other Sustainable Manufacturing targets are achieved

Strategies for Operation

• Outside operator detects an abnormal situation (e.g.  visual inspection, noise, etc.)

• Field data readings are wirelessly transmitted and combined with real time process sensor data and suggest impending failure

maintenance wants to ____?operations wants to   _____? 

• How is the work process handled ?

• Should we deal with this in a logical  ‐consistent way ?

Architecture

Maintenance ManagementCondition Monitoring

Enterprise Asset ManagementWork management ‐Materials Management – Plant 

Maintenance – Supply Chain Management

Engineering andDesign

Change ManagementRegulatory Documents

Engineering DataTag Master

Targets & Schedules Performance & Constraints

Production DataIncident DataQuality DataCycle Times

Production Management/Monitoring

Enterprise Asset Performance Management Performance Analytics                           Capability Assessment

Strategy Management

Asset ManagementCondition MonitoringVibration Monitoring

Online Device Monitoring

Schedules

Asset Management Landscape

MonitoringStrategy

ConditionalAlerts

EngineeringCharacteristics

Re-DesignRecommendations

MaintenanceHistory

MaintenanceStrategy

Process Historians/Condition Monitoring•Predictive Technologies•Online Monitoring•Anomaly Detection

Enterprise Asset Management (EAM)•Work management•Materials Management•Purchasing and Stores

Engineering and Design•Tag Master•Engineering Data•Regulatory Documents•Management of Change

Enterprise Asset Performance Management (EAPM)•Strategy Development (RCM, RBI,etc.)•Strategy Management (Asset)•Condition Assessment (Calibration, Inspection, etc.) •Performance Management (KPIs, RCA, Analysis, etc.)

Asset Lifecycle – Traditional Model

Capital Costs (CAPEX) Net Income

ROA

÷

OPEX Revenue

Project Management

FEEDDetailedDesign

Source & BuildPlan

Operate & Maintain Retire

Asset Management

Commission & Handover

Plant Assets Lifecycle

Time

Prelim

Engr, P

roj

Budge

t & Sch

edule

Stea

dy In

crea

sein

Fac

ility

Use

Optimiza

tion

Detailed Engr,

BOMs, Exec Plan

Wear/

ObsolescenceSource/Build

Commission,

Hands-on Training

Retire FromOperationSell/

Remove

Pilot Oper,

Prod Validation

Identify

OpportunityA

naly

sis &

Cos

ting

of A

ltern

ativ

es

ARC Advisory Group.

Asset Lifecycle Management Processes

Prelim

Engr, P

roj

Budge

t & Sch

edule

Stea

dy In

crea

sein

Fac

ility

Use

Optimiza

tion

Detailed Engr,

BOMs, Exec Plan

Wear/

ObsolescenceSource/Build

Commission,

Hands-on Training

Retire FromOperation

Sell/

Remove

Pilot Oper,

Prod Validation

Identify

OpportunityA

naly

sis &

Cos

ting

of A

ltern

ativ

es

Design &Build

Operate & Optimize

Maintain &Improve

ARC Advisory Group.

EAPM Measures (KPIs)

PhysicalPhysical

VirtualVirtualHu

man

Hum

an

Design &

Build

Operate & Optimize

Maintain &

Improve

Operators and Maintenance personnel can focus their joint efforts toward

major problems

OEE = Utilization% * Rate% * Yield%Where:UTIL% = Utilization(Actual)/Utilization(Planned)RATE% = Production Rate(Actual)/Production Rate(Planned)Yield% = Prime Yield(Actual)/Prime Yield(Planned)

ROCE% = PROFIT% * CAPEX% * DESIGN% * OEE%Where:ROCE% = ROCE(actual)/ROCE(Planned)PROFIT% = Per Unit Profit(Actual)/Per Unit Profit(Planned)CAPEX% = Invested Capital(Planned)/Invested Capital(Actual)3DESIGN% = Availability(Actual)/Availability(Planned)

Business Processes Focus

Management EH&S

OperationsMaintenance Inspection

Business Process

FailureReduction

Production Incident Tracking

MechanicalIntegrity

Focus on Business Process

With EAPM

Financial

MaintenanceMaintenance

PlantPlantPlant

OperationsOperations InspectionInspection EH&SEH&S

Operational Silos

WO/EAPM

Operational Drivers

Normally 5-7% Cost Avoidance is achieved when Asset Performance Management System is used effectively

It has been shown that typically equipment reliability problems accounts for about 38 percent of all unplanned slowdowns or shutdownsApplications &

Information

People & Processes

Disconnected

Strategy &

Programs

Problems with Data Quality, Data Entry Completion, End users are not reliability oriented,

No Standardization

Production Losses Provide Basis for EAPM

(B)Planned Production

(C)Maximum Production

(A)Good Production

Total Effective Equipment Performance (TEEP)

Overall Equipment Effectiveness (OEE)

TEEP = A/C

OEE = A/B

The ratio of the good product produced to maximum possible production over a given calendar time period

The ratio of the good product produced to planned production over a given calendar time period

EAPM Added Value

Enterprise Asset Performance Management (EAPM)

Applications & Information

People & Processes

Strategy &

Programs

Enterprise Asset performance management is the backbone to culture of reliability

EAPM provides asset owners with a single point of access to a collaborative transactional workspace to manager their assets throughout their productive lifecycle

EAPM enables organizations to identify, contain, analyze and remove production losses and thus

improve production performance

Requirements For a Successful Deployment

• Visible corporate leadership – Baseline reliability performance expectations

• The establishment of clear, attainable goals

• The selection of metrics– Measure reliability performance and a path to improvement

• Establishing a partnership with IT Services to develop and implement change

• Clearly defined roles and responsibilities– Impacted Maintenance, Operations – the entire organization

Prerequisites for a Successful Implementation

• Ensure Good Reliability and Maintenance Data Entry

• Establish Business KPI’s and provide consistent methods of calculations

• Conduct risk-based criticality assessment of plant equipment (ABC indicator)

• Establish Root Cause Analysis

• Establish RCM, PMO, Reliability Engineering, Statistics, Six Sigma

• Work flow roles and responsibilities

• Inspection Module and Management Empowerment

Effective EAPM Implementation

The following actions must be emphasized and accomplished:

• Management of Change (MOC): Support / Participation

• Culture Change: Change Toward APM

• Software / Tool: Cost of Suitable Integration

• Readiness: Measure / Gap Analysis

• APM Effective Implementation: Action Plan

• Training: APM Focused Training and Awareness Sessions

• Changing Agent: Empower & Support Implementation Team

• Implementation Method: Selective Sites at a time, Business Vertical, Corporate Business

EAPM Culture Requirements

• Companies are Facing a Challenge– Shift from Reactive to Pro-active culture

• Why moving to reliability culture– To ensure business success– To provide a safe working environment– To meet changing regulations

• The requirements to achieve cultural change– Management commitment – Reliability is everyone’s responsibility (Operations,

Maintenance, Engineering)

Assets Expected Return

As large investments in assets and ongoing cost are made, owners are eager to see higher rates of return on their capital employed – maximized lifecycle value.This gets fulfilled when:

• The operational performance of plant assets is assured

• The risk involved in operating those assets are controlled

EAPM ROI Prerequisites

Clearly and consistently communicate the value of EAPM to the higher management

Establish awareness program of the value of EAPM for the organization

EAPM Direct Savings

• Reduction of unplanned downtime• Reduction of planned downtime (TA frequency can be extended)• Reduction of maintenance inventory • Avoidance of major maintenance work• Reduced production losses• Reduced safety and environmental losses• Reduced Capital Costs (better life cycle costs management can be

achieved leading to significant savings in total material costs)• Improved quality performance (product quality can be improved and rework

of produced parts can be decreased)• Improved Energy Utilization (this improvement is achieved through early

detection and resolutions of performance deficiencies)• Maximize the effectiveness of your assets• Optimize the productivity and reliability of your plant assets

Prevent Disasters

Summary

Deploying EAPM provides: – Integrated solution for reliability and

maintenance– Obtaining a satisfactory ‘transformation

change’ (cultural, data quality, and management)

ARC Advisory Group.

Q&AQ&AThank You